Ashcroft: No Conflict on Monitoring Deal

Tuesday, March 11, 2008 9:32 PM

WASHINGTON -- Former Attorney General John Ashcroft denied any conflict of interest Tuesday in getting a multimillion-dollar contract to monitor a corporation accused of bribing surgeons.

Ashcroft bristled at the suggestion from a House Judiciary subcommittee chairman, Rep. Linda Sanchez, D-Calif., that he got "a back room, sweetheart deal" from the U.S. attorney in New Jersey, a one-time underling.

"This hearing cost far more in tax dollars than my monitorship will cost, because it did not cost taxpayers one thin dime," Ashcroft responded to questioning by the panel. "There is not a conflict, there is not an appearance of a conflict."

Christopher Christie, the U.S. attorney for New Jersey and formerly a subordinate of Ashcroft, picked the former attorney general last September to be an outside monitor of Zimmer Holdings Inc. of Warsaw, Ind.

Zimmer, a manufacturer of replacement hips and knees, was one of four companies that agreed to pay fines and hire outside monitors under deferred prosecution agreements settling charges over alleged kickbacks to doctors.

Zimmer agreed to pay Ashcroft's law-lobbying firm between $28 million and $52 million to monitor the company for 18 months and report the results to the government.

Rep. Henry Johnson Jr., D-Ga., asked Ashcroft why his firm is collecting two fees — $750,000 a month plus $895 per hour — more than other monitors also appointed in the New Jersey case.

"The reason our fees are appropriate is the complexity of the case and the extent to which we have been involved," Ashcroft replied.

Rep. Chris Cannon, R-Utah, said Democrats' attack on Ashcroft's character was "inappropriate."

On Monday, the Justice Department issued new guidelines for administering deferred prosecution agreements in white-collar criminal cases.

The guidelines require that contracts for federal monitoring of corporations be approved by the Justice Department's second-ranking official.

Assistant Attorney General Alice S. Fisher said the guidelines were designed to increase transparency in how independent monitors are selected, and clarify the scope and duration of their duties.

Sanchez said the government has tremendous leverage over corporations that agree to deferred prosecution.

"Corporations facing criminal prosecution have an unfair choice. They can either risk a conviction and perhaps even dissolution after trial or be coerced into accepting the terms and the monitor that a prosecutor unilaterally believes are appropriate," she said.

Zimmer's deferred prosecution agreement provides for dismissing a criminal complaint charging it with conspiracy to violate anti-kickback statutes if Ashcroft certifies after 18 months that the company has complied with the settlement's terms.

Sanchez also brought up a now-completed monitoring agreement with Bristol-Myers Squibb Co. in which the drug maker endowed a chair in ethics at Seton Hall's law school, Christie's alma mater, as part of the settlement.

David Nahmias, the U.S. attorney in Atlanta, said Seton Hall was the second choice for the endowed chair. Rutgers, which was approached first, already had a similar position, he said. Both schools are in New Jersey.

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